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NSE Intra-day chart (25 July 2017)
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Market Commentary 26 July 2017
Markets to make a positive start on penultimate day of F&O expiry

Indian equity benchmarks ended the volatile day of trade with modest cut on Tuesday, as traders opted to remain on sidelines ahead of Fed's two-day meeting starting later in the day to discuss its monetary stance. It turned out to be a historic day of trade for Nifty where it breached the 10,000 mark for the first time in opening trade but soon slipped below the landmark, making the affair a touch-and-go one, as traders opted to book profit at higher level. Sensex too hit another record high of 32,374.30 in initial trade before closing lower by 18 points. However, losses remained capped with commerce and industry minister Nirmala Sitharaman's statement that Foreign Direct Investment (FDI) inflows into the country increased 23 percent in the first two months of the current fiscal from a year ago. The minister said the government has put in place an investor-friendly policy for FDI and except for a small negative list most sectors are open for 100 percent FDI. Some solace also came with report that India ranked number two on Grant Thornton's Business Optimism Index in the second quarter of 2017. The Grant Thornton International Business Report (IBR) said that the confidence in Indian businesses is backed by a buoyant economy and continued reforms. According to the IBR survey, India's ranking has gone up from fourth to the second position in Q2. 94 percent of the surveyed businesses are confident about the growth of the Indian economy. Traders also took some comfort with report that government think tank Niti Aayog has made a strong case for boosting investments and savings, with an aim to push India's economic growth at a rapid pace. The Aayog stressed on sustaining macro-economic stability in its appraisal of the Twelfth Five Year Plan (2012-17). The document noted that lower savings and investment rates are still a major cause of worry. Finally, the BSE Sensex slipped 17.60 points or 0.05% to 32,228.27, while the CNX Nifty was down by 1.85 points or 0.02% to 9,964.55.


The US markets closed higher on Tuesday, with the S&P 500 and the Nasdaq closing at records, while the Dow industrials too posted gains, following better-than-expected results from a number of high-profile companies. On the economy front, consumer confidence rose in July to the second highest level in 16 years as Americans shrugged off all the drama in President Trump's Washington and took heart in the best labor market in a decade. The consumer confidence index rose to 121.1 this month from 117.3 in June. The high level of confidence in July was only surpassed by a 124.9 reading in March just as the Trump administration was getting underway. Confidence soared after Trump was elected last November, especially among Republicans and independents. US home-price growth eased slightly but remained healthy as demand outweighs supply throughout the housing market. The S&P/Case-Shiller 20-city index rose 5.7% in the three-month period ending in May compared with a year ago, down from 5.8% in the prior period. The Dow Jones Industrial Average added 100.26 points or 0.47 percent to 21,613.43, Nasdaq added 1.36 points or 0.02 percent to 6,412.17, while S&P 500 edged higher by 7.22 points or 0.29 percent to 2,477.13.


Crude oil futures rallied on Tuesday and surged to the highest in six months, as OPEC vowed to re-balance oil markets even if it takes supply quotas through 2018. Traders cheered Saudi Arabia's pledge to lower crude exports and Opec's commitment to boost compliance with output cuts to curb excess supplies. The Saudi energy minster added that the production-cut agreement could be extended beyond March if necessary but any further extension would rely on non-compliant nations adhering to the agreement. Meanwhile, OPEC said that inventories in the developed world were still 250 million barrels above the five-year average, but that's 90 million fewer than the second half of last year. Benchmark crude oil futures for August delivery surged by $0.61 or 3.3 percent to $47.89 on the New York Mercantile Exchange. In London, Brent crude for August delivery ended higher by 2.92 percent at $50.02 a barrel on the ICE.


Extending losses for the second day in a row, Indian rupee ended marginally weaker against the US dollar on Tuesday, due to increased demand of the greenback from the importers and the banks. Investors remained cautious ahead of the US Federal Reserve meeting due later today on clues over next policy tightening. Sentiment was also dampened by lackluster trade in the equity markets. However, losses remained capped as some comfort came with commerce and industry minister Nirmala Sitharaman's statement that Foreign Direct Investment (FDI) inflows into the country increased 23 percent in the first two months of the current fiscal from a year ago. Finally, the rupee ended at 64.38, 4 paise weaker from its previous close of 64.34 on Monday.


The FIIs as per Tuesday's data were net sellers in equity segment, while they were net buyers in debt segment. In equity segment, the gross buying was of Rs 4806.28 crore against gross selling of Rs 5076.61 crore, while in the debt segment, the gross purchase was of Rs 2855.92 crore with gross sales of Rs 1228.54 crore.


The US markets came out of their sluggishness in last session and with the upward move on the day, the Nasdaq and the S&P 500 reached new record closing highs. The gains were positive reactions to latest earnings and an unexpected improvement in consumer confidence in the month of July. The Asian markets have made mostly a positive start taking cues from the US markets led by the gains in energy stocks after Saudi Arabia's promise to further cut crude exports spurred the biggest rally in oil since November. The Indian markets losing their initial momentum and turning choppy during the day, ended marginally in red in the last session. Today, the start of the penultimate session of the F&O series expiry is likely to be modestly in green on sanguine global cues. Though, traders will be eyeing the US Federal Reserve's policy decision later in the day for more clues on its tightening plans. On the domestic front, the government has approved an addition of 7.47 lakh new registration applications under the Goods and Services Tax (GST) regime. The banking and telecom stocks will be in focus, as the Finance Minister Arun Jaitley has said banks have an exposure of Rs 97,681 crore in the telecom sector, which is grappling with financial stress. Total outstanding (funded) advances by public sector banks to the 'communications' sector stood at Rs 63,415 crore, while total exposure to the sector worked out to be Rs 97,681 crore. Power sector too will keep buzzing, as the Ministry of Power has said that outstanding liabilities of power distribution companies to central public sector undertaking power producers have halved under the Ujwal Discom Assurance Yojana.


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  • HDFC Bank has made additional general provisions of Rs 206.3 crore towards the stressed telecom and iron & steel sectors during the first quarter of FY18.
  • Tata Steel's JV - mjunction has been appointed by the Directorate General of Hydrocarbons to build a platform for e-bidding, e-evaluation of bids and e-allocation of oil and gas fields.
  • Wipro has entered into a partnership with Hewlett Packard Enterprise to offer IT infrastructure solutions in a consumption-based or pay-per-use business model for enterprises.
  • Ambuja Cement has reported 11.86% rise in its consolidated net profit at Rs 718.24 crore for the quarter ended June 30, 2017 as compared to Rs 642.11 crore for the corresponding quarter in the FY17.
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